Key Takeaways
- The Michigan Consumer Sentiment Index for October inched down from September as respondents to the survey raised few worries about the ongoing government shutdown.
- However, worries about the labor market pushed the measure to its lowest since May.
The government may be shut down, but consumers hardly noticed in early October.
The Michigan Consumer Sentiment Index came in at 55.0 in the preliminary October reading for the closely followed survey, a tick lower than the September final reading of 55.1. Still, it’s the lowest sentiment reading since May, when consumers reacted to President Donald Trump’s tariff announcements. Economists surveyed by The Wall Street Journal and Dow Jones Newswires expected a steeper drop in sentiment to 53.5.
Why This is Important for You
Consumer sentiment surveys can gauge consumer spending, employment levels, inflation and other factors that help determine the strength of the economy.
The survey, conducted through Monday, Oct. 6, showed little change from the prior month’s results, even amid the start of a federal government shutdown. The survey indicated that consumer perceptions of current economic conditions improved slightly in October, while expectations for future economic conditions declined somewhat.
“Overall, consumers perceive very few changes in the outlook for the economy from last month,” said survey director Joanne Hsu. “Interviews reveal little evidence that the ongoing federal government shutdown has moved consumers’ views of the economy thus far.”
Job Worries Persist
The report showed that consumers in October still carried many of the same worries they had in September, especially those related to the jobs market. Heather Long, chief economist at Navy Federal Credit Union, noted that 60% of respondents to the survey expect unemployment to rise in the next year.
“American consumers are gloomy and it’s easy to understand why: They are starting to see the impacts of tariffs on prices at the store and they are nervous about the job market,” Long wrote.
However, while labor market concerns persisted, consumers felt somewhat more optimistic about inflation, as year-ahead inflation expectations declined slightly to 4.6% from 4.7%
